THE TRUE STORY OF THE FICO SCORE – AND WHY IT MATTERS TO
CLINICAL RESEARCH SITES
By Barry Lake, Chairman & CEO, Devana Solutions, LLC
March 14, 2017
In recent weeks many of you have heard me making the point that the clinical trial site industry needs more data so that ‘good’ or top- performing sites can differentiate themselves from ‘bad’ or under-performing sites.
It would be good for the sites – who will win more business – but more data would also allow CROs and Sponsors a greater ability to select sites that can deliver effective clinical trials, ultimately making trials quicker and less costly.
Devana’s technology allows important timing and performance metrics data to be stored and shared by trial sites with CROs and Sponsors as the basis for a “Devana Scorecard” to demonstrate the strength of their performance and case for selection for a trial.
I have often compared the “Devana Scorecard” to the equivalent of a FICO score for the clinical trial site industry – most recently in an interview with Dan Sfera, author of the Clinical Scoop blog: www.theclinicalscoop.com article
The FICO score is now so commonplace, it struck me that many people do not know the story behind it, the impact it has had on consumer lending and what lessons it holds for the trial site industry.
The FICO score allows banks, credit card companies and other lenders to evaluate the potential risk of lending money to consumers.
Before it existed, lending decisions were based partly on a report prepared on you in utmost secrecy – apparently the report included such observations as the quality of your furniture and your character – and the whim of the underwriter at the bank you were applying.
As ad-hoc and unreliable credit scoring systems were being developed by individual lenders, the FICO Score was developed in 1956 by the engineer William Fair and the mathematician Earl Isaac who had met while working at Stanford. They formed a company Fair, Isaac & Co (the initials of the company spell FICO – which is what the company re-named itself in 2009).
At first the system was used by individual lenders as private clients of Fair Isaac. The first general purpose FICO score was developed in 1989. Fannie Mae and Freddie Mac began using it in 1995.
To underline how important the FICO score has become in consumer lending, more than 10 BILLION scores are purchased every year by lenders – and more than 100 million Americans have access to their own FICO score.
While the exact formula for calculating a score has never been revealed, we do know it includes weighted consideration of payment history, debt burden, length of credit history, types of credit and recent credit searches.
Just think how much risk has been taken out of lending thanks to the FICO Score?!
And consumers, thanks to an amendment to the Fair Credit Reporting Act which passed in 2003, now get free access to their credit reports to gain an understanding of what they need to do to achieve a higher FICO Score to get cheaper loans.
It’s a win-win for both lenders and consumers.
And that’s exactly why we at Devana Solutions believe the clinical trials industry needs that FICO or “Devana Scorecard” equivalent.
The trial sites with good ‘credit’ will use their “Devana Scorecard” to prove it and win the business they deserve.
Trial sites whose ‘credit’ needs a little mending will know where they need to improve to strengthen their game.
And the CROs and Sponosrs will have a way of recruiting trial sites that dramatically lowers their site selection risk and improves trial efficiency and effectiveness to get new drug therapies to market quicker and at a lower cost.
About Devana Solutions®, LLC
Devana SolutionsⓇ is a SaaS provider that is driven by a core belief that selection of the top-performing Research Sites to align with drug sponsors and CRO’s are the key to reducing drug costs and curing disease. Devana Solutions® MATCH PERFORMANCE reduces site selection risk for CRO’s and sponsors by providing access to historical and real-time performance & timing metrics on investigator sites, improving trial feasibility and performance while reducing clinical trial cycle time and costs. Devana Solutions® IGNITE FOR SITES cloud-based platform centralizes study leads and contacts, while automatically tracking each site’s timing and performance metrics from study lead through trial completion. With a couple of mouse clicks, these metrics can be standardized into reports for drug sponsors and CRO’s to validate the site’s capabilities. A full demonstration of either software is available upon request at www.devanasolutions.com. Toll-free 1-877-DEVANA-2.